44TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 1999

RELATING TO UNFAIR TRADE PRACTICES; PROVIDING THAT THE SALE OF CERTAIN SERVICE CONTRACTS IN CONJUNCTION WITH THE SALE OF A MOTOR VEHICLE IS AN UNFAIR OR DECEPTIVE TRADE PRACTICE PURSUANT TO THE UNFAIR PRACTICES ACT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. A new section of the Unfair Practices Act is enacted to read:

"[NEW MATERIAL] SALE OF THIRD PARTY SERVICE CONTRACTS FOR MOTOR VEHICLES.--

A. It is an unfair or deceptive trade practice for a person to issue, sell or offer to sell a third party service contract to the owner of a motor vehicle.

B. As used in this section:

(1) "motor vehicle" means a passenger motor vehicle, including an automobile, pickup truck, motorcycle or van normally used for personal, family or household purposes;

(2) "third party service contract" means an agreement, other than a warranty, that:

(a) is sold within six months of the purchase by the owner of a motor vehicle;

(b) is sold for a separately stated consideration or for a specific duration; and

(c) obligates a person, other than the manufacturer or the seller, to perform the repair, replacement or maintenance of the motor vehicle or indemnify another for repair, replacement or maintenance; and

(3) "warranty" means a warranty made solely by the manufacturer, importer or seller of a motor vehicle without charge that is not negotiated or separated from the sale of the motor vehicle and is incidental to the sale and that guarantees indemnity for defective parts, mechanical or electrical breakdown, labor or other remedial measures, such as repair or replacement of the motor vehicle or repetition of services."